ADDIS ABABA, July 9 (Xinhua) -- Ethiopia and Eritrea have agreed to resume air services and for landlocked Ethiopia to use Eritrean ports for its growing foreign trade, Ethiopian Prime Minister Abiy Ahmed said on Sunday.

Ahmed made the statement hours after he landed in Eritrea. In a live statement from the Eritrean Presidential Palace in Asmara broadcast by state media in Eritrea and Ethiopia, Ahmed said the air services and port usage agreement aim to create a people-to-people ties between the two countries.

Ahmed also said he has agreed with his Eritrean President Isaias Afwerki to reopen each other's diplomatic missions in their respective countries.

In June Ethiopia received a high-level Eritrean delegation led by Eritrean Foreign Minister Osman Salah, the first high level Eritrean delegation to visit Ethiopia in 20 years.

The Eritrean delegation came to Ethiopia after Eritrean President Isaias Afwerki declared that his country would send a team to Ethiopia to assess a recent Ethiopia peace offer.

On June 5, the Executive Committee of the ruling party, the Ethiopian People Revolutionary Democratic Front (EPRDF) passed decision expressing Ethiopia's commitment to an unconditional implementation of Algiers peace agreement with Eritrea.

The peace agreement ended the two-year border war, but a tense armed standoff continued, with the two countries engaging in skirmishes occasionally.

Ethiopia until this month had declined to endorse the results of the peace agreement fully, including the symbolically important town of Badme which Ethiopia currently controls but which was awarded to Eritrea.

Eritrea for its part had until recently insisted the border demarcation must be done first before any talks on normalizing ties.